[edit] Supreme Court Decision 99Da3358 delivered on April 2, 2002 [Promissory Note]

【Main Issues】

[1] The scope of retroactive application of the Constitutional Court of Korea's decision that Clause 2 of Article 1026 of the former Korea Civil Code (KCC) is in violation of the Constitution and the scope of application of the relevant provisions of the amended KCC

[2] Whether, when a litigation is pending in an ordinary court, a party files an application seeking a ruling that Clause 2 of Article 1026 of the former KCC is not in compliance with the Constitution, but withdraws the application as the Constitutional Court of Korea rules that the provision at issue is against the Constitution, the litigation is subject to the retroactive application of the above Constitutional Court's decision and thus to the relevant provisions of the amended KCC

【Summary of Decision】

[1] Once the Constitutional Court of Korea determines that provisions of certain laws are not in compliance with the Constitution and thus mandates lawmakers to amend the laws to be consistent with the Constitution or repeal them at their own discretion, it is the lawmakers who may determine whether the amended laws shall be applied retroactively and decide the scope of the retroactive application thereof. However, given the purport of the Constitutional Court's decision of August 27, 1998 in the 96Hun-Ga22 case, etc. ruling that Item 2 of Article 1026 of the former Korea Civil Code (amended by Act, Law No. 65951 of January 14, 2002) is not in compliance with the Constitution and from the perspective of the effective guarantee of normative control in the adjudication on constitutionality, we find that such Constitutional Court's decision of unconstitutionality shall apply retroactively to cases in connection with which the Constitutional Court rendered such decision, and to other lawsuits pending in courts, which involve the issue of whether Item 2 of Article 1026of the former KCC is against the Constitution or not at the time of the above Constitutional Court's decision. In this regard, we conclude that even though such cases are not included in the scope of application of the transitional measures specified in Paragraph 3 of the Addendum of the amended KCC, they shall be subject to provisions of the amended KCC, not the provisions of the former KCC.

[2] If, when a litigation is pending in an ordinary court, a party files an application seeking a ruling that Item 2 of Article 1026of the former KCC is not in compliance with the Constitution but withdraws the application as the Constitutional Court of Korea rules that the provision at issue is against the Constitution, the litigation is subject to the retroactive application of the above Constitutional Court's decision, and the transitional measures included in the amended KCC shall be applied to the party. Therefore, if the party does not know the fact that the inherited obligations exceed the inherited property without any gross negligence within the period set forth in Paragraph 1 of Article 1019 of the KCC, he or she may effect a qualified acceptance under the provision of Paragraph 3 of Article 1019 of the amended KCC within three months from the date when the amended KCC takes effect.

【Reference Provisions】 [1] Article 1026 Clause 2 of the former Civil Code (amended by Act, Law No. 6591 of January 14, 2002), Article 1019 Items 1 and 3, Article 1026 Clause 2 and Addendum (January 14, 2002) Items 1, 2 and 3 of the Civil Code, Article 47 of the Constitutional Court Act / [2] Article 1026 Clause 2 of the former Korea Civil Code (amended by Act, Law No. 6591 of January 14, 2002), Article 1019 Items 1 and 3, Article 1026 Clause 2 and Addendum (January 14, 2002) Items 1, 2 and 3 of the Korea Civil Code, Article 47 of the Constitutional Court Act

Article 47 of the Constitutional Court Act (Effect of Decision on Unconstitutionality) (1) The Constitutional Court of Korea's decision that certain laws are against the Constitution shall be binding upon courts, other state organs and local governments.

(2) The laws or provisions thereof which are determined to be unconstitutional shall become invalid on the date when such decision is made; provided, however, that the laws or provisions governing criminal punishment shall become invalid retroactively.

(3) In case of the proviso of the above Paragraph 2, if a court renders a final and conclusive judgment that a person is guilty based on the laws or provisions thereof which have been determined to be unconstitutional, the person may institute a petition for re-trial.

(4) Provisions of the Criminal Procedure Act shall apply mutatis mutandis to the lawsuit for re-trial provided in the above Paragraph 3.

【Reference Precedent Cases】 [1] Constitutional Court Decision 96Hunga22, 97Hunga2, 3 and 9, 96Hunba81, 98Hunba24 and 25 delivered on August 27, 1998 (HunGong29, 693)

【Plaintiff, Appellee】 Ku Seong-sun

【Defendant, Appellant】 Kim Sun-gi and 3 others

【Court of First Instance】 Seoul District Court Judgment 96Gadan51920 delivered on May 7, 1997

【Court of Second Instance】 Seoul District Court Judgment 97Na24817 delivered on November 6, 1998

【Disposition】 The judgment of the court below shall be reversed and the case shall be remanded to the Appellate Division of the Seoul District Court.

【Reasoning】 1. In the decision of 96Hunga22 of August 27, 1998, the Constitutional Court of Korea determined that Item 2 of Article 1026 of the former Korea Civil Code (KCC) was not in compliance with the Constitution. The former KCC amended by Act, Law No. 6591 of January 14, 2002, and Item 2 of Article 1026 of the former KCC, which had become invalid by the Constitutional Court's decision, was restated in the KCC. In addition to that, Paragraph 3 of Article 1019 was newly established in the amended KCC. According to the newly established provision, if an inheritor does not know the fact that the inherited obligations exceed the inherited property without any gross negligence within the period set forth in Paragraph 1 of Article 1019 of the KCC and effects an absolute acceptance (including the case where he is deemed to effect an absolute acceptance pursuant to the provisions of Items 1 and 2 of Article 1026), he may effect a qualified acceptance within three months from the date when he becomes aware of such fact. However, such provision does not apply retroactively as provided in Paragraphs 1 and 2 of the Addendum to the KCC, and shall apply starting January 14, 2002 when the amended KCC takes effect. Nonetheless, certain inheritors who came to know the commencement of inheritance before January 14, 2002 may avail themselves of protection of the amended KCC. Transitional measures incorporated into Paragraph 3 of the Addendum to the amended KCC, provide that "even though an inheritor became aware of the commencement of inheritance between May 27, 1998 and January 14, 2002, if he does not know the fact that his of her inherited obligations exceed inherited property, without any gross negligence, within the period set forth in Paragraph 1 of Article 1019 of the KCC, and fails to effect a qualified acceptance even after he became aware of such fact before January 14, 2002, he may effect a qualified acceptance in accordance with the amended provision of Paragraph 3 of Article 1019 of the KCC within three months after January 14, 2002; provided, however, that if he does not effect a qualified acceptance within the above period, he is deemed to effect an absolute acceptance."

2. Once the Constitutional Court of Korea determines that provisions of certain laws are not in compliance with the Constitution and thus mandates lawmakers to amend the laws to be consistent with the Constitution or repeal them at their own discretion, it is the lawmakers who may determine whether the amended laws shall be applied retroactively and decide the scope of the retroactive application thereof. However, given the purport of the Constitutional Court's decision of August 27, 1998 in the 96Hunga22 case, etc. ruling that Item 2 of Article 1026 of the former Korea Civil Code (amended by Act, Law No. 65951 of January 14, 2002) is not in compliance with the Constitution and from the perspective of the normative control of the guarantee of effectiveness in the adjudication on constitutionality, we find that such Constitutional Court's decision of unconstitutionality shall apply retroactively to cases in connection with which the Constitutional Court rendered such decision, and to other lawsuits pending in a court, which involve the issue of whether Item 2 of Article 1026 of the former KCC is against the Constitution or not at the time of the above Constitutional Court's decision. In this regard, we conclude that even though such cases are not included in the scope of application of the transitional measures specified in Paragraph 3 of the Addendum of the amended KCC, they shall be subject to provisions of the amended KCC, not the provisions of the former KCC.

3. Finding of Facts

The late Jeong Ho-young issued promissory notes to the Plaintiff before he died on January 15, 1996. The Defendants are inheritors of the late Jeong Ho-young, and were defeated in the first trial of the litigation where the Plaintiff initiated to seek repayment of the promissory notes issued to the Plaintiff (the Litigation). However, objecting to the judgment rendered in the first trial, the Defendants appealed to a higher court. On October 21, 1997 when the Litigation was pending in the court below, the Defendants filed an application seeking a decision that Item 2 of Article 1026 of the former KCC is not in compliance with the Constitution but withdrew the application as the Constitutional Court of Korea ruled that the provision in issue is against the Constitution. In this regard, it is deemed that this Litigation is subject to the retroactive application of the above Constitutional Court's decision, and the transitional measures included in the amended KCC shall be applied to Defendants. Therefore, if the Defendants did not know the fact that the inherited obligations exceeded the inherited property without any gross negligence within the period set forth in Paragraph 1 of Article 1019 of the KCC, they may effect a qualified acceptance pursuant to the provision of Paragraph 3 of Article 1019 of the amended KCC within three months from the date when the amended KCC began to take effect.

Nonetheless, the court below applied Item 2 of Article 1026 of the former KCC to the Litigation, and deemed that the Defendants effected an absolute acceptance with regard to inherited property, and further acknowledged the Plaintiff's claim without any limitation. In light of the foregoing, we conclude that in the court below's decision there was a reversible error in matters of law in interpreting the legal principles regarding inheritance. Therefore, we find the relevant grounds for appeal acceptable.

4. Based on the foregoing, we decided to reverse the decision of the court below with the assent of all Justices who reviewed the appeal and remand this case to the court below for further review and a complete examination of the evidence.

Justices Song Jin-hun (Presiding Justice)

Byun Jae-seung

Yoon Jae-sik (Justice in charge)

Lee Kyu-hong

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